MUMBAI: The nation’s largest lender State Bank of India (SBI) has raised Rs 6,051 crore from Basel III-compliant tier 2 bond issuance, at a coupon rate of 7.05%.
The 10-year bonds, second tranche of the tier 2 issuance done earlier in October when it mopped up Rs 7,500 crore at a coupon of 6.93%, have a call option after five years and each anniversary date thereafter and are rated AAA with stable outlook.
The higher rate indicates the risk aversion build-up since the Iran war began two weeks ago.
The issue that was closed Tuesday attracted an excellent response from investors with bids of around 2x against the base issue size of Rs 5,000 crore, the bank said in a statement. The issuer got bids from 47 qualified institutional investors from across provident funds, pension funds, mutual funds, banks etc.
“Based on the response, the bank has decided to accept Rs 6,051 crore at a coupon rate of 7.05% payable annually for 10 years with a call option after 5 years and each anniversary date thereafter,” the statement said.
Chairman CS Setty said wider participation and heterogeneity of bids demonstrated the trust investors place in the country’s largest bank.
In September last year, the bank had raised $500 million in five-year dollar debt sale at 4.5% coupon rate as part of its $10 billion medium term note programme.
In July last year, the bank had raised Rs 25,000 crore in a QIP issue, making it the single largest fund raising through this mode.
Last fiscal, the bank had raised Rs 15,000 crore through tier II bonds and another $500 million through five-year dollar bonds at a yield of 5.13%.